Search This Blog

Subscribe to this blog

Follow by Email

In a culture of secrecy, no courage is required (the unedited version)

“A Temasek spokeswoman declined Friday to comment on the price the fund sold its shares for or the timing of the sale”, reported the Associated Press. Why should the secretive Temasek Holdings reveal such sensitive information to a wire agency when they will not reveal it to the real stakeholders in the government holding company, the citizens of Singapore?

Temasek Holdings was formed in 1974, after the government of Singapore took stakes in a variety of local companies, in sectors such as manufacturing and shipbuilding. In 2008, Temasek Holdings (which was by then managing portfolios worth $185 billion), was asked to appear before the US House of Representatives before a joint sub-committee of the House Financial Services Committee in a hearing related to foreign government investments in the United States. Temasek Holdings then declared that, "(it) has to sell assets to raise cash for new investments and doesn't require the government to give approvals", mainly to assuage US concerns on transparency and non-politicization of investments.

But why do you need the government to give approvals, when all the key position holders from the Chairman of the Board to the Chief Executive Officer are all linked to the government of Singapore? The Ministry of Finance is Temasek’s shareholder and the President concurs with the appointment, renewal and removal of Temasek’s directors and chief executive.

It was Mr. S Dhanabalan, a protégé of the former Prime Minister, Mr. Lee Kuan Yew, who Mr. Lee Kuan Yew identified as one of his possible successors (along with Mr. Goh Chok Tong, Mr. Ong Teng Cheong and Mr. Tony Tan), who picked Ms. Ho Ching (the wife of the current Prime Minister, Mr. Lee Hsien Loong), to head Temasek Holdings, saying that she was "the best person for the job," that it had "nothing to do" with her being Mr. Lee's wife, and citing "a willingness on her part to take calculated risks."

Ms. Ho Ching’s penchant for risk-taking came to the fore in July 2007 with Temasek's roughly $6 billion investment in Barclays taking a 2.1 percent stake in the bank. The New York Times then reported that a former (unnamed) advisor to Temasek Holdings as warning that Temasek's strategy of buying big chunks of companies exposes it to potentially deep losses if markets turn.

The warning by the unnamed former advisor now certainly looks prophetic. In March 2009, the Ministry of Finance reported that the Singapore sovereign wealth fund lost $39 billion 31 percent of its value in just eight months. It shrank from $185 billion to $127 billion between March and November last year.

Temasek seems to be on a roll with its losing streak; and what is even more appalling is its continuing secrecy in the face of these losses. A Temasek spokesman who revealed that “We have divested our shares in the Bank of America”, failed to answer any other queries, including the price it got for divesting 188.8 million shares in the Bank of America.

Secrecy seems to be the culture that Ms. Ho has brought with her to Temasek Holdings. Even the age of the Temasek Holdings Chief Executive Officer is often considered off-limits by Temasek Holdings spokespersons.

Temasek Holdings lifts its cloak of secrecy partially when it is beneficial to its cause. For example, in October 2004, to satisfy the legal requirements in issuing bonds to raise money from the public, Temasek reported its accounts to the public for the first time in its 30-year history. Where is this accountability when $6.8 billion seem to have been lost in the untimely divestment from Bank of America? What is even more alarming is the fact that they would have probably kept quiet if not for the compulsory Form 13F filing to the U.S. Securities and Exchange Commission from Temasek indicating that the fund no longer held shares in Bank of America or Merrill Lynch as of 31 March 2009.

In taking pre-emptive measures from the negative response such news will unleash from the public, Ms. Ho posted on Temasek’s website that it will now cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa.

The question remains, even with the pre-emptive statement before the filing was made public, “even if there is a need to cut the exposure to OECD countries, why do it now, especially when you will make such huge losses?” Did not Minister Mentor Lee Kuan Yew say in February this year when explaining why Singapore was able to invest in American banks that, “When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up”?

How right was Minister Mentor when he says that the investments are “your shares”? If this is indeed the share of the people of Singapore, don’t they have a right to know where, when and how the funds are invested; and even more importantly what are the profits and the losses of such investments? Why the reluctance to reveal to the real shareholders the actual price the fund sold its shares of Bank of America for or the timing of the sale?

Ms. Ho was the head honcho of Singapore Technologies before she became the CEO of Temasek Holdings. Singapore Technologies under her leadership bought Micropolis in 1996 for $55 million, despite knowing that Micropolis had a history of failures. Approximately one year later, Singapore Technologies had tired of losses generated by the disk-drive manufacturer and would end Micropolis' operations worldwide; loosing $630 million as a result. The Chairman of Temasek Holdings had defended Ms. Ho’s fiasco in Micropolis by saying that she had the courage to cut the losses.

Ms. Ho seems to leave a trail of taking huge risks and making huger losses, first with Singapore Technologies and now with Temasek Holdings. You need no courage to cut the losses when the funds invested were not yours in the first place.

"Where were the Farid Khans and the Salleh Maricans? Why didn't they come?... Because they knew that in an open election - all things being equal - a non-Chinese candidate would have no chance."
Having contested an election as a minority candidate, I am disturbed enough by his comments to write this note. Let me explain why.

Simple answer for PM Lee

I declined invitations to contest the 2011 General Election. This was because I was at a different stage of my life. My children were much younger, I had just come back from the USA a few years before and had to re-establish my career here. I did not know if I had the temperament for public life. These were just some of the reasons why I chose to decline those invitations.

Even in 2011, the pool of people who could qualify for the Presidential race was small.…

The Ministry of Communication and Information (MCI) has taken out a Facebook ad titled, 'Get real about fake news', The ad is taken out after the PAP-controlled Parliament passed the Protection from Online Falsehoods and Manipulation (POFMA) Bill, with all opposition Members of Parliament voting against the Bill.

The ad draws attention to the viral hoax that Punggol Waterway Terraces had collapsed. The ad said "the hoax triggered anxiety amongst the residents", and urged Singaporeans to "say no to fake news".

It is unfortunate that a website published such an unverified report, and it is certainly unacceptable that it caused much anxiety to the residents of the development (and to all Singaporeans). The publishers and the editors of the website acted irresponsibly in posting the report of the 'collapse' without proper verification, and no one should make any excuses for them for this.

Lamenting the lack of concentration of brilliance in Singapore, PM Lee Hsien Loong in a IPS dialogue held recently said that he believed in having a certain natural aristocracy in the system (a form of elitism where people are respected because they have earned that) for without that society will lose out. (Transcript of Speech here: http://bit.ly/1JOtiYP)

His views are of course not new and he had articulated them in another Speech in the year 2007, expressing why he believed that Singapore does not have enough talent for two A-Teams (link: http://bit.ly/1NFyA9s).

I am not sure if this view is healthy for Singapore. Why I say that? Let me quote a few persons and articles before I make my point.